CareTrust REIT, Inc
CTRE
$39.58
-0.45%
CareTrust REIT, Inc. is a self-administered, publicly traded real estate investment trust (REIT) that owns, acquires, finances, and leases skilled nursing, seniors housing, and other healthcare-related properties, primarily under triple-net lease arrangements. The company operates as a niche player in the healthcare REIT sector, distinguishing itself through a focus on smaller, often overlooked properties and a disciplined acquisition strategy that targets higher yields. Currently, the investor narrative centers on CareTrust's robust growth trajectory, driven by a significant expansion in its portfolio and revenue, as well as its ability to maintain strong occupancy and rental collections despite broader industry headwinds. The stock has attracted attention for its consistent dividend growth and a favorable supply-demand dynamic in the seniors housing market, though concerns about tenant concentration and rising interest rates remain part of the debate.…
CTRE
CareTrust REIT, Inc
$39.58
Investment Opinion: Should I buy CTRE Today?
Rating: Buy. CareTrust REIT offers a compelling risk-reward profile with strong growth, high profitability, and a reasonable valuation. The consensus rating is Strong Buy with an average target of $45.38, implying 14.7% upside. The thesis is supported by exceptional revenue growth of 99% YoY, a PEG of 0.25, and a net margin of 67.26% (trailing). The stock trades at a slight premium to peers, but the growth justifies it. The dividend yield of 3.52% provides income while waiting for capital appreciation. The main risks are tenant concentration and interest rate sensitivity, but the company's low leverage and strong cash flow mitigate these concerns. This Buy rating would be downgraded to Hold if revenue growth decelerates below 20% or if the payout ratio exceeds 90%. Conversely, it could be upgraded if the stock pulls back to below $35, offering a better entry point. Overall, CTRE is fairly valued to slightly undervalued relative to its growth potential.
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CTRE 12-Month Price Forecast
The AI assessment is bullish on CTRE, driven by exceptional growth metrics and a favorable valuation. The company's ability to grow revenue at nearly 100% while maintaining high margins is rare in the REIT sector. The low beta and strong analyst support provide additional confidence. However, the medium confidence reflects uncertainties around interest rates and tenant concentration. If the company can sustain growth above 30% and manage leverage, the stock has significant upside. A downgrade to neutral would occur if revenue growth falls below 20% or if the payout ratio exceeds 90%, signaling potential dividend risk.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CareTrust REIT, Inc's 12-month outlook, with a consensus price target around $45.38 and implied upside of +14.7% versus the current price.
Average Target
$45.38
0 analysts
Implied Upside
+14.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$43 - $49
Analyst target range
CareTrust REIT is covered by 13 analysts, with a consensus recommendation of 'Strong Buy' (mean rating of 1.31 on a 1-5 scale where 1 is strong buy). The average price target is $45.38, implying an upside of 14.7% from the current price of $39.58. The distribution of ratings is heavily bullish, with no sell ratings and only one neutral rating (Cantor Fitzgerald), while the majority are Buy or Outperform. This strong consensus reflects confidence in the company's growth strategy and dividend sustainability. The target price range spans from $43.00 (low) to $49.00 (high), representing a spread of 14.0% from the average, which indicates moderate uncertainty. The high target of $49.00 assumes continued portfolio growth and margin expansion, while the low target of $43.00 may price in potential tenant issues or rising interest rates. Recent institutional actions show no downgrades, with firms like BMO Capital, Wells Fargo, and RBC Capital maintaining or initiating positive ratings, reinforcing the bullish sentiment.
Bulls vs Bears: CTRE Investment Factors
CareTrust REIT presents a compelling growth story with exceptional revenue expansion, high profitability, and strong analyst support. The bull case is anchored by a 99% YoY revenue surge and a PEG of 0.25, indicating undervaluation relative to growth. However, the bear case highlights tenant concentration, high payout ratio, and sensitivity to interest rates, which could pressure the stock. Currently, the bull case has stronger evidence given the robust fundamentals and analyst consensus, but the key tension lies in whether the company can sustain its growth trajectory amid rising rates and potential tenant issues. If growth decelerates or interest rates spike, the stock could face significant downside, making the investment debate centered on the sustainability of the acquisition-driven expansion.
Bullish
- Exceptional Revenue Growth: Q1 2026 revenue surged 99.29% YoY to $142.78M from $71.65M, driven by aggressive acquisitions. This growth is the highest in the healthcare REIT sector and demonstrates the success of the company's expansion strategy.
- High Profitability and Margins: Net margin for Q1 2026 was 56.18%, with operating margin at 65.14% and EBITDA margin at 85.76%. These metrics indicate strong operational efficiency and pricing power, typical of a well-managed triple-net lease REIT.
- Strong Analyst Consensus: 13 analysts rate CTRE a Strong Buy (mean 1.31), with an average price target of $45.38, implying 14.7% upside. No sell ratings and only one neutral rating reflect high confidence in the company's growth trajectory.
- Attractive Valuation on PEG: With a PEG ratio of 0.25, the stock is undervalued relative to its earnings growth potential. The trailing PE of 23.03x is near the lower end of its historical range (18x-85x), suggesting room for multiple expansion if growth persists.
Bearish
- Revenue Concentration Risk: The company's revenue is heavily dependent on a few tenants, with the top tenants contributing a significant portion of rental income. A default by a major tenant could severely impact cash flows and dividend sustainability.
- Rising Interest Rate Sensitivity: As a REIT, CTRE is sensitive to interest rate movements. Higher rates increase borrowing costs for acquisitions and could compress cap rates, slowing growth. The recent pullback from the 52-week high may partly reflect rate concerns.
- High Payout Ratio: The payout ratio is 80.9%, leaving limited room for dividend increases or reinvestment. If earnings dip, the dividend could be at risk, which would likely trigger a sell-off.
- Premium Valuation to Peers: CTRE trades at a 4.7% premium to the industry average PE (23.03x vs 22.0x). While justified by growth, any slowdown could lead to multiple compression, especially if the market perceives the growth as unsustainable.
CTRE Technical Analysis
CareTrust REIT's stock is in a clear uptrend over the past year, with a 1-year price change of +14.59%, though it has recently pulled back from its 52-week high of $43.62. As of August 21, 2026, the stock trades at $39.58, which is approximately 90.7% of its 52-week range (calculated as (39.58 - 32.79) / (43.62 - 32.79) = 0.907). This positioning near the upper end of the range suggests that while the stock has experienced a modest correction, it remains in a constructive long-term trend, with the 52-week low of $32.79 providing a significant support level.
Beta
0.80
0.80x market volatility
Max Drawdown
-14.3%
Largest decline past year
52-Week Range
$33-$44
Price range past year
Annual Return
+14.6%
Cumulative gain past year
| Period | CTRE Return | S&P 500 |
|---|---|---|
| 1m | -6.6% | +3.6% |
| 3m | -3.8% | +2.7% |
| 6m | -1.2% | +11.4% |
| 1y | +14.6% | +18.7% |
| ytd | +9.0% | +12.3% |
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CTRE Fundamental Analysis
CareTrust REIT has demonstrated exceptional revenue growth, with the most recent quarter (Q1 2026) reporting revenue of $142.78 million, a 99.29% year-over-year increase from $71.65 million in Q1 2025. This dramatic growth is driven by a series of acquisitions and portfolio expansion, as evidenced by the sequential revenue progression from $86.03 million in Q2 2025 to $104.27 million in Q3 2025, $135.05 million in Q4 2025, and $142.78 million in Q1 2026. The company's net income also surged to $80.21 million in Q1 2026, up from $65.80 million in the prior year quarter, reflecting a net margin of 56.18%. Gross margin remains robust at 56.85% for Q1 2026, though slightly down from the 96.97% seen in Q1 2025, likely due to a change in revenue mix or cost structure. The company is highly profitable, with an operating margin of 65.14% and an EBITDA margin of 85.76% in Q1 2026, indicating strong operational efficiency typical of triple-net lease REITs.
Quarterly Revenue
$142783000.0B
2026-03
Revenue YoY Growth
+99.3%
YoY Comparison
Gross Margin
56.9%
Latest Quarter
Free Cash Flow
$397136000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CTRE Overvalued?
Given that CareTrust REIT has positive net income, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 23.03x, while the forward PE is 22.30x, indicating that the market expects modest earnings growth of approximately 3.3% over the next year. This narrow gap suggests that the market's growth expectations are relatively subdued, which is consistent with a mature REIT. Compared to the industry average PE of 22.0x (based on available data), CareTrust trades at a slight premium of 4.7%, which is justified by its superior revenue growth and high net margin of 67.26% (trailing). The company's PEG ratio of 0.25 is well below 1, suggesting that the stock is undervalued relative to its earnings growth potential, though this metric should be interpreted with caution given the cyclicality of REIT earnings. Historically, CareTrust's PE has ranged from approximately 18x to 85x over the past two years, with the current 23x near the lower end of that band, indicating that the stock is trading at a discount to its historical average and may offer value if growth persists.
PE
23.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 18x~42x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: CareTrust's financial health is generally solid, but there are notable risks. The debt-to-equity ratio of 0.22 is low, but the company has been increasing leverage to fund acquisitions, as seen in rising interest expenses (from $6.67M in Q1 2025 to $11.24M in Q1 2026). The payout ratio of 80.9% leaves little buffer for dividend cuts if earnings decline. Revenue concentration is a significant risk; the top tenants account for a large portion of rental income, and any default could severely impact cash flows. The company's net income is volatile, with Q2 2024 showing a net margin of only 19.4% due to one-time items, indicating earnings can be lumpy. Free cash flow is positive at $397M TTM, but the high payout ratio means most of it is distributed to shareholders, limiting internal reinvestment.
FAQ
The key risks are: 1) Tenant concentration - a default by a major tenant could severely impact revenue and dividends. 2) Interest rate risk - rising rates increase borrowing costs and make REITs less attractive, potentially compressing the stock's multiple. 3) High payout ratio - at 80.9%, there is limited buffer for dividend cuts if earnings decline. 4) Regulatory risk - changes in healthcare reimbursement could affect tenant profitability. The most severe risk is a combination of tenant default and rate hikes, which could lead to a 20-30% decline in the stock price.
The 12-month forecast is positive. In the base case (50% probability), the stock is expected to reach $42-46, with an average target of $45.38. In the bull case (30% probability), it could reach $45-49, driven by continued strong growth and favorable rates. In the bear case (20% probability), it could fall to $33-38, if tenant issues or rate spikes occur. The most likely scenario is the base case, assuming revenue growth moderates to 30-40% and no major disruptions. Overall, the stock has a favorable risk-reward profile with an expected return of around 10-15% over the next year.
CTRE is fairly valued to slightly undervalued. The trailing PE of 23.03x is slightly above the industry average of 22.0x, but the PEG ratio of 0.25 indicates that the market is not fully pricing in the company's growth potential. Historically, the stock has traded at PE multiples ranging from 18x to 85x, and the current 23x is near the lower end, suggesting room for multiple expansion. The market is pricing in modest growth of about 3.3% (based on forward PE), which seems conservative given the 99% revenue growth. Therefore, the stock appears undervalued relative to its growth prospects.
Yes, CTRE is a good buy for investors seeking growth and income. The stock has a Strong Buy consensus with an average target of $45.38, implying 14.7% upside. The PEG ratio of 0.25 suggests it is undervalued relative to its growth, and the dividend yield of 3.52% provides income. However, the stock is not without risks, including tenant concentration and interest rate sensitivity. It is best suited for investors with a moderate risk tolerance and a time horizon of at least 2-3 years. If you are comfortable with these risks, CTRE is a compelling addition to a diversified portfolio.
CTRE is more suitable for long-term investment due to its growth trajectory and dividend income. The stock has a beta of 0.8, indicating lower volatility than the market, which makes it less attractive for short-term trading. The company's growth is driven by acquisitions, which take time to integrate and generate returns. Over a 3-5 year horizon, the stock has the potential to deliver significant capital appreciation and dividend growth. Short-term traders may find the stock less exciting due to its moderate volatility, but long-term investors can benefit from the compounding effect of dividend reinvestment and earnings growth. A minimum holding period of 3 years is recommended to ride out any interest rate or tenant-related volatility.